Wednesday, 30 May 2012

Structure of Markets for Inputs and Outputs in Colonial Kenya

The structure and the terms of participation in the markets were generally in favour of the settler farmers. Capital markets, for instance, provided them with enormous credits at interest rates considerably below genuine market levels. They were also beneficiaries of the subsidy scheme meant to facilitate speedy land acquisition which could in turn create scarcity in order to push the natives into wage employment. Entry into production and markets for lucrative crops such as tea, coffee and cotton was highly regulated. Through the Marketing of Native Produce Act, the natives could only participate in the markets if they were in possession of permits and licences.

The marketing boards were perhaps the hallmark of systematic attempts designed to use the market as an instrument of political control and exploitation. The idea that started out merely as a crisis response during war-time exigencies, however, survived. The first to be established was the Maize Control Board. Within few years that followed, each major crop had its own board vested with powers to oversee both the production and marketing processes.

The market institutional structures worked in favour of the settlers by systematically repressing the purchasing power of the natives. Keeping them out of the production of lucrative crops ensured that they earned their living barely at the borders of subsistence and would, eventually, be pushed into wage employment. The stringent terms of participation in the market coupled with the discriminatory pricing structure of marketing boards meant that the natives could hardly achieve a standard of living much above the margins of subsistence. Thus it could be concluded that ‘the colonial system created structures that forced the bulk of the population to be without independent means of subsistence, therefore, forced them to sell their labour on the market’.